Crypto Fraud Mastermind Arrested, $12B Bitcoin Seized

The criminal enterprise allegedly orchestrated by Chen Zhi, a Cambodian national and chairman of Prince Holding Group, was built on a brutal and systematic model. According to the U.S. Department of Justice indictment, Zhi’s conglomerate trafficked hundreds of workers to scam compounds in Cambodia, where they were held against their will and forced to execute sophisticated cryptocurrency frauds. The primary method was the “pig butchering” scam, a term derived from fattening livestock before slaughter. In this scheme, workers built online relationships with unsuspecting victims over time, gaining their trust before convincing them to invest in fraudulent crypto opportunities, ultimately stealing their funds.

Zhi is accused of directly managing these compounds, keeping meticulous records, and instructing associates to use cryptocurrency to obscure the illicit profits. The scale of the operation was immense, with the network allegedly amassing over 127,271 Bitcoin. At current prices, this haul is valued at approximately $11.6 billion, all of which has been seized and is now in the custody of the U.S. government. The indictment details how the proceeds were not merely hoarded; Zhi and his associates allegedly funneled the stolen funds into luxury lifestyles, including extravagant travel and the purchase of high-value assets like a painting by Pablo Picasso.

The legal response to Zhi’s alleged crimes has been historic in both scale and scope. The October indictment by the U.S. Department of Justice did not only charge Chen Zhi with wire fraud conspiracy and money laundering conspiracy. In a significant escalation, the DOJ also designated his Prince Group as a transnational criminal organization and imposed sanctions on Zhi and other key individuals. This designation amplifies the legal and financial consequences, restricting the group’s global operations and enabling more aggressive asset seizures.

The civil forfeiture action targeting the 127,271 Bitcoin is described as the largest in the Department of Justice’s history. This move underscores a growing focus by U.S. authorities on tracing and recovering illicit crypto assets, treating cryptocurrency not as an untraceable haven for criminals but as a ledger that can be followed. The arrest in Cambodia and subsequent extradition to China highlights the complex, multi-jurisdictional nature of modern financial crime, requiring cooperation between nations like the U.S., Cambodia, and China to apprehend key figures.

While the seizure of nearly $12 billion in Bitcoin from Chen Zhi’s network is a record-breaking enforcement victory, it represents only a fraction of the illicit funds circulating in the cryptocurrency ecosystem. According to a report from blockchain analytics firm Chainalysis cited in the source material, on-chain crypto balances linked to criminal activity globally exceed $75 billion. This figure provides critical context, revealing that Zhi’s operation, for all its enormity, is part of a much larger underground economy.

The Chainalysis data indicates a troubling trend of growth in criminal crypto holdings. The report notes that illicit entities held nearly $15 billion in funds as of last July alone—a gain of more than 300% since 2020—with the bulk originating from stolen funds. This surge underscores the persistent attractiveness of cryptocurrency for fraud and money laundering, despite increasing regulatory scrutiny and enforcement actions like the one against Chen Zhi and Prince Holding Group. The case serves as both a landmark success and a stark reminder of the ongoing challenge facing regulators, law enforcement, and the legitimate crypto industry in combating financial crime in the digital age.